Vol. 5 Num 571 Tue. January 03, 2006  
Front Page

Gas supplies fall sharply in Europe

Gas supplies to much of Europe fell sharply yesterday in the fallout of Moscow's pricing dispute with Ukraine while several nations urged energy-hungry industries to switch to oil and rationing began in Serbia.

Serbia was worst affected, with its gas deliveries cut in half. But other nations also reported susbtantial losses of between 18 and 40 percent. Apart from Serbia, gas was flowing normally to homes and businesses thanks to stored supplies.

Despite the dispute, gas prices rose only marginally on Monday on world markets.

Still, with the 25-nation European Union counting on Russia for a quarter of its natural gas needs mostly through Ukraine concern rose that a prolonged standoff could spell severe problems.

The German government urged Russia and Ukraine to compromise quickly in order to resolve their dispute over natural gas deliveries.

Russia took over the rotating presidency of the Group of Eight most wealthy nations on Sunday, with President Vladimir Putin looking to convert his country's energy wealth into political influence.

East European countries many with a record of decades of energy dependency on Moscow established during a half century of domination by the former Soviet Union were the most hurt Monday.

Hungary reported gas supplies down by 40 percent after Russia's OAO Gazprom cut deliveries to neighboring Ukraine, which acts as a transit country for most of Russia's gas consignment to Europe. Russian gas amounts to about 80 percent of Hungary's needs.

MOL, the country's national wholesaler, said households would not be immediately threatened but joined providers in other nations in urging major industrial consumers to switch to backup oil systems. And MOL official Sandor Kantor said his company was cutting deliveries southward to Serbia and Bosnia-Herzegovina.

Serbia said it was receiving 50 percent less gas than normal. Aleksandar Kosadinovic, deputy director of Srbija Gas, the main distributor, said hospitals, schools and other vital consumers were being given priority.

Moldova has not received Russian gas supplies for two days, said President Vladimir Voronin, saying that prices had inexplicably doubled, making it too expensive for the former Soviet republic to renew a contract with Russian company Gazprom.

Polish Economy Minister Piotr Wozniak said gas deliveries at the Polish-Ukrainian border had risen to about 65 percent of the daily norm, from a low of 50 percent on Sunday.

Apparently referring to fears of a complete collapse in deliveries from Russia, Economy Minister Pitor Wozniak said the country had stocks of "seven or eight days."

Romania's deliveries from Russia were down by 25 percent, said officials, but unseasonably warm weather eased immediate concerns.

In Austria, the OMV energy conglomerate said that natural gas imports from Russia via Ukraine were down by a third over usual levels. Slovak state oil company official Alexander Nemudrov told Russia's Gazprom-owned NTV television on Monday that it was receiving just 60 percent of the gas it needs to export further West.